Executive Action to Suspend the Conflict Minerals Rule in the Dodd-Frank Act Will Plunge the Great Lakes into A New Cycle of Violent Conflict

The Southern Africa Resource Watch (SARW) and its civil society partners in the Democratic Republic of Congo (DRC) are very concerned that the suspension of the conflict minerals rule promulgated by the Securities Exchange Commission (SEC) pursuant to Section 1502 of the Dodd-Frank Act will negatively impact peace, stability and development in the DRC, and the Great Lakes region. We urge the Trump Administration not to suspend this critical section of the law.

The illegal exploitation of natural resources by American, European and Asian companies was at the root of the conflicts that raged in the DRC between 1996 and 2003. Armed groups operating in eastern DRC benefitted financially from the procurement of cheap minerals by these companies, which contributed to the persistence of violence. The conflicts in the DRC have killed more people than the two World Wars combined. This was the context in which the U.S. Congress found that the exploitation of and trade in minerals were helping to finance conflict characterized by extreme violence in eastern part of the DRC—including sexual and gender-based violence—creating a humanitarian emergency in the area. In an effort to counter this illicit financing of conflict in the DRC, Congress passed section 1502 of the Dodd-Frank Act.

Section 1502 of Dodd-Frank requires companies under the jurisdiction of the Security and Exchange Commission (SEC) to report annually on whether they are using minerals from the DRC. All companies have to report on the due diligence they have undertaken to verify their supply chain and avoid conflict-promoting metals. This initiative made the United States a leader in promoting peace in an area that has been plagued by wars, political instability, and poverty. The European Parliament followed America’s lead when it passed the regulation on responsible trade in minerals originating in the Congo in May 2015.

The Dodd-Frank Act has had enormous positive effects. Dodd-Frank has contributed significantly to reducing the influence of the armed groups in eastern DRC, which have been using the illegal exploitation of mineral resources to fund their violent activities for years. The initiative has also minimized the supply chain risks of conflict minerals to Western companies. It has prevented rebel movements and other negative forces in eastern DRC from using the sale of tin, tantalum, and tungsten to fuel conflict in the region. Dodd-Frank has been hailed as a major milestone in the global transparency regime around conflict minerals. Our work in the DRC has revealed that beyond transparency, Dodd-Frank has had a significant impact by convincing national and international mining stakeholders of the importance of better regulating the mining activities in eastern DRC. Dodd-Frank has also helped increase awareness amongst all stakeholders with respect to mining fraud and contraband; it has speed up the implementation of the traceability and certification procedures and the demilitarization of mining sites.

There is no doubt suspending the conflict minerals rule of the Dodd-Frank Act will reverse the progress that has been made thus far and facilitate the supply of conflict minerals to international markets. This approach will undermine peace by reviving dying militia and rebel groups that are operating in the Great Lakes region.

Natural resources in conflict-prone or high-risk areas—irrespective of the great potential they hold for development—can fuel violence while undermining economic development, good governance and the rule of law. In such areas, it is crucial that the link between conflict and the illegal exploitation of minerals be broken in order to achieve peace and stability.

We therefore call upon President Donald Trump, his Administration, and the U.S. Congress to desist from any effort to undermine, suspend, or repeal the conflict minerals rule in Section 1502 of Dodd-Frank.

Behind SARW’s appointment are the various activities since 2010 to tackle the illegal exploitation of natural resources in the Great Lakes Region, the Alternative Summit on the margins of ICGLR Heads of State Special Summit.

The mining industry contributes significantly to the hardship experienced by black women in rural areas of South Africa. For decades, mining houses have drawn in young black men for labour, only for many to return home sick, with little to show for years spent toiling underground.